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LAUNCH ISSUE
What Harry did next Banga’s billion-dollar bet
www.maritime-ceo.com
wherever you sail...
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LAUNCH ISSUE 1
wherever you sail...
Marine lubricants
KPi briDGe oil provides cost efficient lubrication solutions and expert technical services to the shipping industry.
For worldwide and 24/7 high performance marine lubricants deliveries contact our global team: [email protected]
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KPI Marine annonce.indd 10 27/05/13 14.48
Manifest
3 At The Prow
Economy4 US5 EU7 China8 India9 Brazil
Markets11 Dry Bulk13 Tankers15 Containers
The Issue18 Executive Debate
Profiles23 Cover Story Caravel Group25 BW Group26 Panacore
27 BIMCO29 Pacific Basin29 Precious Shipping30 Petredec30 StealthGas31 Österreicher Lloyd33 Frontline 201234 Nordic American Tankers35 Wilh. Wilhelmsen36 BBC Chartering37 Mercmarine39 Pacific Richfield Marine
Recreation40 Gadgets41 Books42 Travel
Opinion43 The Contrarian44 MarPoll
23
4
Amarante Shipping Pte. Ltd. • Andersen Shipping Company Pte. Ltd. • Andhika Lines PT • Anglo-Eastern
Ship Management Ltd. • Apeejay Shipping Limited • Bernhard Schulte Shipmanagement • Bernhard
Schulte Shipmanagement (China) Co. Ltd. • Bernhard Schulte Shipmanagement (Hong Kong) Ltd. Pa •
Bernhard Schulte Shipmanagement Pte. Ltd. • Bestella Navigation Inc. • BHP Billiton Marketing Asia Pte.
Ltd. • Caravel Logistics Pvt. Ltd. • Cargill Ocean Transportation (Singapore) Pte. Ltd. • Ceyline Shipping
Ltd. • Chang Myung Shipping Co. Ltd. • Chellaram Shipping (Hong Kong) Ltd. • China COSCO Bulk
Shipping (Group) Co., Ltd. • China National Chartering Co., Ltd. • China Ocean Engineering Services
• China Shipping (Group) Company • Chinese Maritime Transport Ltd. (CMT) • Chinese Polish Joint
Stock Shipping Co. • Chowgule Steamships Limited • Columbia Shipmanagement (Singapore) Pte.
Ltd. • Cosco (H.K.) Shipping Co. Ltd. • COSCO Container Lines • COSCO Shipping Co. Ltd. • Daebo
International Shipping Co. Ltd • Daeyang Shipping Co. Ltd. • Dai Duong Shipbuilding Co. Ltd. • Daiichi
Chuo Kisen Kaisha • Dalian Ocean Shipping Company • Eastwell Agents Limited • Eitzen Chemical •
Essar Shipping Limited • EUKOR Car Carriers • Exeno Yamamizu Corporation • Fairtrade Chartering
(H.K.) Ltd. • First Steamship Company Ltd. • Five Ocean Corporation • Five Stars Bulk Carriers Ltd. •
Franklin Offshore International Pte. Ltd. • Genshipping Pacific Line Pte. Ltd. • Glory Ship Management
Pte. Ltd. • Goldbeam International Limited • Goodearth Maritime Limited • Goodrich Maritime Pvt. Ltd.
• Grand Seatrade Shipping Company Ltd. • Grindrod Shipping Pte. Ltd. • Hanjin Shipping Company
Limited • Hong Kong Ming Wah Shipping Co. Ltd. • Hsin Chien Marine Co. Ltd. • Hunan Ocean
Shipping Company • Hyundai Merchant Marine Co., Ltd. • Iino Kaiun Kaisha Ltd. • Ikhlas Offshore
Shipping Co. Pte. Ltd. • IMC Shipping Co. Pte. Ltd. • IMECS Co. Ltd. • Inui Steamship Co. Ltd. • Isaphia
(Singapore) Pte. Ltd. • Island Navigation Corporation • Jade Ship Shipmanagement Limited • Jiangsu
Far East Shipping Co. Ltd. • Kambara Kisen Co. Ltd. • Kansa Maritime LLP • Kawasaki Kisen Kaisha, Ltd.
• KC Maritime Ltd. • Korea Marine Transport Company Ltd. • Kuang Ming Shipping Corp • Leighton
Offshore Pte Ltd. • Lift and Shift India Pvt. Ltd. • Lihai International Shipping Ltd. • Meiji Shipping Co.,
Ltd. • Mitsubishi Ore Transport Co., Ltd. • Mitsui O.S.K. Lines Ltd. • MSPL Diamond Pte. Ltd. • MTM Ship
Management Pte. Ltd. • Neptune Orient Lines Ltd. • Nippon Yusen Kaisha • Noble Chartering Limited •
NS United Kaiun Kaisha, Ltd. • NYK Shipmanagement Pte. Ltd. • Ocean 21 Holdings Pte. Ltd. • Ocean
Connection Pte. Ltd. • Ocean Diving Centre Limited • Ocean Longevity Shipping • Ocean Maritime
Management Co. Ltd. • Orchard Maritime Logistics Pte. Ltd. • Orient Marine Co., Ltd. • Orient Overseas
Container Line • Pacific Basin Shipping (HK) Limited • Pacific Bulk Shipping Limited • Pacific Carriers
Limited • Pacific World Shipping Pte. Ltd. • Pan - United Shipping Pte. Ltd. • Petro Vietnam Technical
Services Corporation • Posh Semco Pte. Ltd. • Precious Shipping Public Company Limited • Primorsk
Shipping Corporation • Regional Container Lines (Pte) Ltd. • Regulus Ship Services Pte. Ltd. • RK Offshore
Management Pte. Ltd • Samco Shipholding Pte. Ltd. (SAMCO) • Sammok Shipping Co., Ltd. • Samson
Maritime Limited • Sanmar Shipping Limited • Seacastle Singapore Pte. Ltd. • Shanghai Costamare •
Singa Ship Management Pte. Ltd. • Sino East Shipping Ltd. • Sinotrans Shipping Ltd. • SK Shipping Co.,
Ltd. • Sojitz marine & Engineering Corporation • Splendor Enterprises S.A. • STX Pan Ocean Co., Ltd. •
Sumisho Marine Co. Ltd. • Swire Pacific Offshore Operations (Pte) Ltd. • Tai Chong Cheang Steamship
Co. • Target Ship Management Pte. Ltd. • The China Navigation Co. Pte. Ltd. • The Great Eastern
Shipping Co. Ltd. • The Sanko Steamship Co. Ltd. • The Shipping Corporation of India Ltd. • Thome
Ship Management Pte. Ltd. • Thoresen & Co., (Bangkok) Ltd. • Tolani Shipping Co. Ltd. • U-Ming
Marine Transport Corp. • Unique Shipping (H.K.) Limited • Univan Ship Management Ltd. • Universal
Navigation Pte. Ltd. • Varun Shipping Company Limited • Vinalines Container Shipping Company •
Wah Kwong Shipping Agency Co. Ltd. • Wallem Shipmanagement Ltd. • West Asia Maritime Ltd.
BIMCO’s mission is to provide first class services to its membership representing all segments of the shipping industry:
• Expert advice and guidance on all aspects of daily shipping transactions.
• Access to the largest compilation of contemporary and practical shipping information.
• Developing standard contracts and clauses.
• Promoting fair business practices, free trade and open access to markets.
• Enhancing proficiency through its educational programmes.
• 2,400 members in 120 countries.
• Representing the majority of the world’s commercial fleet.
Tel: +45 4436 6800 www.bimco.org
Join today or e-mail for more information: [email protected]
An ocean of expertise
Acting in the best interests of its members s ince 1905
LAUNCH ISSUE 3
Oh no, not another maritime publication,” I hear you groan as this magazine
thuds down on to your desk (or uploads to your iPad). Quite right, Maritime ceo is not just another maritime publication, it is some-thing quite different, and rather special, if I say so myself. As such, we’re the business class magazine onboard an airline rather than the standard glossy offered to the masses at the back of the plane.
Asia Shipping Media (ASM) founded the brand as our f lagship at the beginning of the year with a specific niche — and something we have stuck to ever since — to target the very top echelon of shipping. This magazine’s sister website, www.maritime-ceo.com, carries an interview with a head honcho from a maritime firm every working day. Naturally, we can’t carry every sin-gle one, so to cram a few extra juicy ones into this magazine, you will see the odd mugshot plus quote and QR code at the bottom of pages (such as below) which links to the original interview, part of ASM’s commitment to be a 21st century media company that properly straddles the demands of internet readers and traditional magazine subcribers.
Inside this magazine, specifically tailored for the busy head of a shipping firm, you will find exclusive analysis of
key economies from top economists around the world and market com-mentary from well-known names on the three main sectors.
There’s also an industry debate in every issue — this issue it centres around the reality of ecoships.
After that, there’s 15 pages of exclusive interviews with those right at the top of the maritime food chain, the shipowners, led by our cover story, a new $1bn entry into shipping.
At the back of the magazine there is more of a lifestyle feel to the title with books, travel and gadgets (anyone need a hover golf cart?) as well as an acerbic column from Andrew Craig-Bennett before the back page, which dovetails with earlier online commitments. Every couple of weeks we run a poll on Maritime ceo’s LinkedIn group — results of recent votes are carried on page 44.
So, read on! We are, we hope, something refreshingly different. Thoughts, questions, reactions, quibbles — feel free to drop me a line: [email protected] ●
Sam ChambersEditorMaritime ceo
at the prow
Why we’re different“
An ASM publication
Editorial Director: Sam [email protected]
Associate Editors: Jason [email protected]
Katherine [email protected]
Correspondents:Athens: Ionnis NikolaouBogota: Richard McCollCairo: Ronak HousaineCape Town: Joe CunliffeDubai: Yousra ShaikhHong Kong: Alfred RomannLondon: Craig JallalMumbai: Divya LadNew York: Suzanne SmithOslo: Hans ThaulowPortland: Joshua Samuel BrownShanghai: Engen ThamSingapore: V SubramanianSydney: Ross White-ChinneryTaipei: David GreenTokyo: Masanori Kikuchi
Contributors: Nick Berriff, Andrew Craig-Bennett, Charles De Trenck, Paul French, Chris Garman, Jeffrey Landsberg, Peter Sand, Siddhartha Sanyal, Eytan Uliel
Cover: André Eichman
Editorial material should be sent to [email protected] or mailed to Office 701, 9 Renmin Lu, Zhongshan District, Dalian, China 116001
Commercial Director: Grant [email protected]
Maritime ceo advertising agents are also based in Japan, Korea, Scandinavia and Greece — to contact a local agent email [email protected] for details
MEDIA KITS ARE AVAILABLE TO DOWNLOAD AT: www.maritime-ceo.com
All commercial material should be sent to [email protected] or mailed to Asia Shipping Media, 20 Cecil Street, #14-01 Equity Plaza, Singapore 049705
Design: Lamma Studio DesignPrinters: Allion Printing, Hong Kong
Subscriptions: A $120 subscription is charged for 2014’s four issues of Maritime ceo magazine. Email [email protected] for subscription enquiries.
Copyright © Asia Shipping Media (ASM) 2013www.asiashippingmedia.com
Although every effort has been made to ensure that the information contained in this review is correct, the publishers accept no liability for any inaccuracies or omissions that may occur. All rights reserved. No part of the publication may be reproduced, stored in retrieval systems or transmitted in any form or by any means without prior written permission of the copyright owner. For reprints of specific articles contact [email protected]
Twitter: @Maritime_CEOLinkedIn: Maritime CEO ForumFacebook: ASM Maritime & Offshore News
“By taking actions today you will
be more able to handle conventions that will be put into force in the near future”— Gry Cecilie Sydhagen,
ceo Metizoft
Amarante Shipping Pte. Ltd. • Andersen Shipping Company Pte. Ltd. • Andhika Lines PT • Anglo-Eastern
Ship Management Ltd. • Apeejay Shipping Limited • Bernhard Schulte Shipmanagement • Bernhard
Schulte Shipmanagement (China) Co. Ltd. • Bernhard Schulte Shipmanagement (Hong Kong) Ltd. Pa •
Bernhard Schulte Shipmanagement Pte. Ltd. • Bestella Navigation Inc. • BHP Billiton Marketing Asia Pte.
Ltd. • Caravel Logistics Pvt. Ltd. • Cargill Ocean Transportation (Singapore) Pte. Ltd. • Ceyline Shipping
Ltd. • Chang Myung Shipping Co. Ltd. • Chellaram Shipping (Hong Kong) Ltd. • China COSCO Bulk
Shipping (Group) Co., Ltd. • China National Chartering Co., Ltd. • China Ocean Engineering Services
• China Shipping (Group) Company • Chinese Maritime Transport Ltd. (CMT) • Chinese Polish Joint
Stock Shipping Co. • Chowgule Steamships Limited • Columbia Shipmanagement (Singapore) Pte.
Ltd. • Cosco (H.K.) Shipping Co. Ltd. • COSCO Container Lines • COSCO Shipping Co. Ltd. • Daebo
International Shipping Co. Ltd • Daeyang Shipping Co. Ltd. • Dai Duong Shipbuilding Co. Ltd. • Daiichi
Chuo Kisen Kaisha • Dalian Ocean Shipping Company • Eastwell Agents Limited • Eitzen Chemical •
Essar Shipping Limited • EUKOR Car Carriers • Exeno Yamamizu Corporation • Fairtrade Chartering
(H.K.) Ltd. • First Steamship Company Ltd. • Five Ocean Corporation • Five Stars Bulk Carriers Ltd. •
Franklin Offshore International Pte. Ltd. • Genshipping Pacific Line Pte. Ltd. • Glory Ship Management
Pte. Ltd. • Goldbeam International Limited • Goodearth Maritime Limited • Goodrich Maritime Pvt. Ltd.
• Grand Seatrade Shipping Company Ltd. • Grindrod Shipping Pte. Ltd. • Hanjin Shipping Company
Limited • Hong Kong Ming Wah Shipping Co. Ltd. • Hsin Chien Marine Co. Ltd. • Hunan Ocean
Shipping Company • Hyundai Merchant Marine Co., Ltd. • Iino Kaiun Kaisha Ltd. • Ikhlas Offshore
Shipping Co. Pte. Ltd. • IMC Shipping Co. Pte. Ltd. • IMECS Co. Ltd. • Inui Steamship Co. Ltd. • Isaphia
(Singapore) Pte. Ltd. • Island Navigation Corporation • Jade Ship Shipmanagement Limited • Jiangsu
Far East Shipping Co. Ltd. • Kambara Kisen Co. Ltd. • Kansa Maritime LLP • Kawasaki Kisen Kaisha, Ltd.
• KC Maritime Ltd. • Korea Marine Transport Company Ltd. • Kuang Ming Shipping Corp • Leighton
Offshore Pte Ltd. • Lift and Shift India Pvt. Ltd. • Lihai International Shipping Ltd. • Meiji Shipping Co.,
Ltd. • Mitsubishi Ore Transport Co., Ltd. • Mitsui O.S.K. Lines Ltd. • MSPL Diamond Pte. Ltd. • MTM Ship
Management Pte. Ltd. • Neptune Orient Lines Ltd. • Nippon Yusen Kaisha • Noble Chartering Limited •
NS United Kaiun Kaisha, Ltd. • NYK Shipmanagement Pte. Ltd. • Ocean 21 Holdings Pte. Ltd. • Ocean
Connection Pte. Ltd. • Ocean Diving Centre Limited • Ocean Longevity Shipping • Ocean Maritime
Management Co. Ltd. • Orchard Maritime Logistics Pte. Ltd. • Orient Marine Co., Ltd. • Orient Overseas
Container Line • Pacific Basin Shipping (HK) Limited • Pacific Bulk Shipping Limited • Pacific Carriers
Limited • Pacific World Shipping Pte. Ltd. • Pan - United Shipping Pte. Ltd. • Petro Vietnam Technical
Services Corporation • Posh Semco Pte. Ltd. • Precious Shipping Public Company Limited • Primorsk
Shipping Corporation • Regional Container Lines (Pte) Ltd. • Regulus Ship Services Pte. Ltd. • RK Offshore
Management Pte. Ltd • Samco Shipholding Pte. Ltd. (SAMCO) • Sammok Shipping Co., Ltd. • Samson
Maritime Limited • Sanmar Shipping Limited • Seacastle Singapore Pte. Ltd. • Shanghai Costamare •
Singa Ship Management Pte. Ltd. • Sino East Shipping Ltd. • Sinotrans Shipping Ltd. • SK Shipping Co.,
Ltd. • Sojitz marine & Engineering Corporation • Splendor Enterprises S.A. • STX Pan Ocean Co., Ltd. •
Sumisho Marine Co. Ltd. • Swire Pacific Offshore Operations (Pte) Ltd. • Tai Chong Cheang Steamship
Co. • Target Ship Management Pte. Ltd. • The China Navigation Co. Pte. Ltd. • The Great Eastern
Shipping Co. Ltd. • The Sanko Steamship Co. Ltd. • The Shipping Corporation of India Ltd. • Thome
Ship Management Pte. Ltd. • Thoresen & Co., (Bangkok) Ltd. • Tolani Shipping Co. Ltd. • U-Ming
Marine Transport Corp. • Unique Shipping (H.K.) Limited • Univan Ship Management Ltd. • Universal
Navigation Pte. Ltd. • Varun Shipping Company Limited • Vinalines Container Shipping Company •
Wah Kwong Shipping Agency Co. Ltd. • Wallem Shipmanagement Ltd. • West Asia Maritime Ltd.
BIMCO’s mission is to provide first class services to its membership representing all segments of the shipping industry:
• Expert advice and guidance on all aspects of daily shipping transactions.
• Access to the largest compilation of contemporary and practical shipping information.
• Developing standard contracts and clauses.
• Promoting fair business practices, free trade and open access to markets.
• Enhancing proficiency through its educational programmes.
• 2,400 members in 120 countries.
• Representing the majority of the world’s commercial fleet.
Tel: +45 4436 6800 www.bimco.org
Join today or e-mail for more information: [email protected]
An ocean of expertise
Acting in the best interests of its members s ince 1905
maritimeceo4
econoMy Us
The US economy beat most economists (and the Fed’s) forecasts in the second quarter
of the year — gross domestic product (GDP) grew at a 2.5% annual rate in the April-June period, according to revised estimates released by the Commerce Department at the end of August. This appears to be on the back of an upswing in exports, which is deeper dive good news for the US economy going forward. What does it mean though? Is the US economy is turning a corner? Is recovery is in full swing? Neither really and something in the middle. But what there does appear to be in America is an upturn in confidence, perhaps the one indi-cator that’s been most conspicuously missing for some time now.
Many analysts expect the US economy will accelerate further in the second half of the year as austerity measures begin to weigh less on national output. It should be remembered that the better-than-ex-pected second quarter numbers came at a time of severely restricted and reigned in government spend-ing in line with Washington’s harsh austerity measures.
Industry in America has more confidence than consumers though
at present it seems. Consumer spend-ing, which still accounts for more than two-thirds of US economic activity, slowed to a 1.8% growth pace after rising at a 2.3% rate in the first quarter. Higher taxes may well be to blame for this blip.
However, for those shipping to and from the States the good news is that manufacturing activity is growing. Additionally jobless claim-ants are bottoming out indicating people are starting to find work. The financial data firm Markit reported that its preliminary index on factory activity rose in August to 53.9, its best showing since March. A reading
above 50 indicates expansion. This is supported by additional energy demand for industry — Customs Administration data showed imports of crude oil and iron ore rebounded from multi-month lows to record highs in August as more raw materials were shipped in to rebuild depleted stocks, and soy bean purchases hit a record for the second straight month.
Where’s the business coming from? Well, China has started to up its orders for American made goods, which is good news for the trade (im)balance. Exports to Europe and Latin America were stronger too. ●
Latest figures out of America paint a rosier picture, but the world’s top economy is not quite out of the woods yet
“Industry in America has more confidence than consumers ”
The bulls are cantering
“When we look at our industry
from the outside, we are lacking positive and charismatic role models”— Birgit Liodden,
secretary general, YoungShip
LAUNCH ISSUE 5
reGULar
5
Economists looking closely at the European Union’s eco-nomic recovery have noticed
that it all looks a little lopsided at the moment. The east is recovering faster than the west. The Czechs saw 0.7% growth, Poland 0.4% and Hungary 0.1% in the second quarter of the year — all back in positive territory after contractions in the first half of 2013.
The reason seems to be a rebound in exports as western European manufacturers look increasingly to source from lower wage economies in closer proximity to their markets than, say, China, Southeast Asia or India. As a sign of this Germany’s Daimler recently opened a plant in Hungary, eschew-ing moving to a farther flung locale.
Exports are stronger than at the start of the year. For instance, the Czech Republic saw a 1.4% upswing in exports. If this manufacturing and export upswing in the east
is matched by a strong return in consumer confidence and spending in Prague, Warsaw and Budapest then the major eastern European economies should be on track for further growth through to the end of the year.
Part of eastern Europe’s rebound is to do with the fringe markets they target — fringe, that is, to the EU. Exports from eastern Europe to Russia, Ukraine and elsewhere are up. However, the east has some competition. Turkey surpassed the EU in industrial production on an annual basis with a 4.2% increase in June 2013 compared to the previous year. Much of this was EU invest-ment looking for cheaper wages and proximity combined.
As politicians have found the signals are harder read in the western European economies. The UK, Germany, France and (notably) Portugal all saw economic growth in the second quarter — around
0.3% on average, but still weak. Portugal’s growth, the strongest in the western portion of the EU in the quarter, was export led. Similarly so in the UK where exports to outside the EU saw strong growth — the UK Office for National Statistics said exports rose 4.9% between April and June to a record £78.4bn in a major boost to the recovering economy. Latin America and Asia were the major destina-tions for British exports while India and Thailand are notably ordering more from the UK too.
When it comes to western European growth though the big-gest surprise is France, predicted to be a long-term economic basket case under the Hollande high tax administration. France posted a stronger-than-expected 0.5% quarter-on-quarter growth with Eurostat for the second quarter of the year. Ordinary French consum-ers it seems are not so despondent — much of France’s stronger economy at the moment is down to an upswing in consumer spending. Unemployment remains high, but it seems, if you’re in work, French confidence has returned somewhat.
Germany, of course, remains the strongest and largest econ-omy in the union and so is closely watched. The continuing strength of the German economy seems to be small and medium enterprise (SME) based, family businesses — both in terms of profits and new job creation to keep Germany’s unemployment numbers down. Cars, machinery and chemicals are all growing export items and, like the UK, Germany is seeing an upswing in exports outside the EU’s borders.
So — lopsided in terms of east versus west and also in terms of where Europe’s exports are heading, outwith rather than within. It may just be that Europe’s best hope is not European recovery but continuing growth and demand in the BRICs. ●
Lopsided recoveryEurope’s slow, slow growth is based more on demand outside of the EU
“The east is recovering faster than the west ”
econoMy eUrope
LAUNCH ISSUE 7
econoMy china
Though Maritime ceo may be over burdened with shipping puns it is the case that the
Chinese economy through the sum-mer has been ‘steady as she goes’. The more cautious analysts are warning against extrapolating too much from the monthly, and rather fluctuat-ing, data, encouraging us to look at year-on-year growth and declines. Betting on monthly data can lead to what CLSA Emerging Market’s China Macro Strategist Andy Rothman refers to as “whiplash” — i.e. monthly upswings do not mean a return to the glory days and monthly down-turns don’t mean impending crash.
Having said that July was encouraging with upswings wit-nessed in most reliable data. Shipowners will be relieved to know that key indicators for their business — industrial value-added and power generation, iron ore and copper imports all strengthened. Autos and electric machinery/equipment boosted output particularly notice-ably. Power generation rose 8.1% year-on-year (the highest monthly growth rate in 2013 so far) indicating production is up and so both imports and exports should strengthen in the second half of the year requiring shipment in and out. Retail sales weakened a bit but not enough to derail the government’s plan to boost domestic consumption as a compo-nent of the overall economy.
The second half may also see some relief from price rises — infla-tion looks set to remain mild, while smaller declines in prices for industrial inputs and outputs could be a signal of firmer domestic demand and, with
the EU and US economies improving, rising export demand again. There was a rebound in export growth to 5.1% in July — strong but overall exports remain relatively weak and won’t change dramatically this year.
The good news is that the private sector of China’s manufacturing economy is currently making most of the running in boosting the econ-omy — profits at privately-owned small and medium sized enterprises (SMEs) are up 15.8% so far this year; state owned enterprises (SOEs) 4.8%. The private sector is clearly growing faster and rebounding from the effects of the global economic crisis faster than the state sector. Additionally SMEs have benefitted from the ongoing reform of the VAT system to reduce their tax burden. A trial run of this VAT reform in 2012 resulted in an average cut in tax bills of 40% for participating SMEs, according to the Ministry of Finance. The VAT reforms should apply nationwide by next year.
Consequently stuff is moving around more — total freight traffic
rose 10.5% year-on-year in June, up from 9.6% in May and 7.9% in April, while total freight ton-kilometres rose 5.8% in June, up from -0.8% in May and -0.4% in April. Truckers are trucking.
So, we’re looking at somewhere between 7.5–8% GDP growth for the year at the moment, roughly equiva-lent to last year. The government will be pleased with this — the wheels are still turning — and argue it is a case of stabilisation of growth in line with a maturing and increasingly sophis-ticated economy. ●
Wheels still turningPaul French points out solid figures, dismissing the doomsayers
“The private sector is growing fastest ”
China’s GDP by sector, Q1 2013RMB 100m Y-o-Y growth (%)
Gross Domestic Product 118854.8 7.7
Primary Industry 7427.0 3.4
• Farming, Forestry, Fishery 7427.0 3.4
Secondary Industry 54569.3 7.8
• Industry 48832.5 7.5
• Construction 5736.8 9.8
Tertiary Industry 56858.6 8.3
• Transport, Storage, Post 6563.4 7.0
• Wholesale and Retail Trade 11913.9 10.5
• Hotel and Catering Services 2418.8 4.5
• Financial Intermediation 8098.5 11.5
• Real Estate 8382.9 7.8
• Others 19481.0 6.8
Source: NBS
“Globalisation as a phenomenon is
maturing which means that trade will no longer grow at such a healthy multiple of GDP growth”— Ken Bloom,
ceo, INTTRA
maritimeceo8
The Indian economy is going through a rough patch. GDP growth, which was in the
8-9% zone even during 2010 and 2011, had steadily weakened since then and remained sub-5% in recent quarters. Inflation had been a major worry throughout 2011 and 2012; however, it seems to be somewhat under control in the current year. Of late, the Indian rupee remained under severe pressure, depreciating about 20% in the last four months and remains one of the worst per-forming currencies globally.
Growth recovery will likely remain slow in the coming months. The manufacturing sector is currently into the third year of sluggishness. The mining sector faces strong judicial intervention amidst allegations of large-scale irregulari-ties and corruption. The momentum of investment spending remains markedly weak and is unlikely to turnaround anytime soon. Monetary conditions remain tight with high interest rates and weak credit offtake. Weak economic performance is leading to rising non-performing assets for most banks.
Moreover, the national election
is set to take place in less than eight months and the political backdrop remains complex. No political party seems to be enjoying any mean-ingful advantage at the moment. A fractured political mandate in the election and another coalition government remain likely after the polls of summer 2014. This is adding to the uncertainties and working against any quick turnaround in the economy. As a result, one would like to maintain a cautious stance on the Indian economy in the near to medium term despite its strong longer-term credentials.
Amidst all these concerns, there are positive developments. Quite a few sectors, including multi-brand retail, aviation, media, insurance and pension funds, have already witnessed or will likely see enhance-ment in limits of foreign direct investment (FDI). New FDI following such enhancement still remains small reflecting current subdued sentiment and upcoming election uncertainties. However, these sectors remain promising over the long run.
In order to improve the long run fiscal health, the government has formulated a new integrated goods
and service tax (GST). While a broad economic and political agreement has nearly been reached, it is being discussed among various states to arrive at a consensus on the modus operandi. The new scheme might turn operational sometime in the next year. Introduction of GST could potentially be a strong move to improve the long run fiscal health of the country.
In the near to medium term, the current account balance, which had faced considerable deteriora-tion in recent years, seems to be improving in 2013, reflecting several policy initiatives by the government, softer import demand in a slow-ing economy, and steady services exports (information technology, in particular). A markedly weaker rupee is also helping the external sector balance to improve to an extent. The most recent initiatives by the Reserve Bank of India (RBI) are also likely to boost near term foreign exchange inflows into the economy to help fund the current account gap. Last but not least, once the RBI gains somewhat better control over the rupee — and that seems possible to an extent in the coming weeks and months — the central bank would likely start easing the extreme tight-ness in liquidity and interest rates. This should be positive at the margin.
To conclude, the broader economy will likely take time to record any meaningful improvement towards its longer-term trend growth rate. However, the excessive bearish-ness in some of the market segments seems to be overpricing probabilities of various negative outcomes in the case of India. It would, thus, not be surprising if certain segments of the financial markets (including the currency and interest rates) start stabilising and improving from their recent lows in the near future. ●
econoMy india
Tiger tamed
“The broader economy will likely take time to improve ”
Barclays’ chief India economist Siddhartha Sanyal identifies challenges
LAUNCH ISSUE 9
econoMy BraziL
After nearly a decade of high growth, economic
activity has slowed down considerably in the last two years, from 7.5% in 2010 to a bit under 1% in 2012. While growth is poised to rebound in 2013, it doesn’t look like it will be much more than 2%. Frustratingly low growth is in great measure attrib-uted to inconsistent and at times excessively inter-ventionist economic policies. From the onset, President Dilma Rousseff approached the global economic slowdown as an opportunity to lower the country’s perennially high interest rates. But she did so while inflation was still dangerously close to the upper limit of the target. In response, the government resorted to targeted tax cuts that provided a temporary fix to the problem. Now, in a context of a weaker currency, the government is resorting to a tighter monetary policy to anchor inflation-ary pressures and regain credibility.
Equally important for the souring of investor sentiment has been Brasilia’s penchant for more active industrial policies in recent years. The list of examples is long. It includes the decision to gut compe-tition in the oil and gas sector and enhance the role of state-controlled giant Petrobras, strong arm com-mercial banks to lower interest rates, and wipe away shareholder value in the power sector by conditioning concession renewals on onerous terms. There is a large debate over what explains Brazil’s low rate of investments and as a result growth, but a mounting sense of policy unpredictability certainly is part of
the explanation.But the policy environment is
reaching an inflection point, with government officials slowly adopting a more investor friendly stance. It is important to remember that the government’s proclivity to intervene in the economy had more to do with conditions than ideology. With the economy expanding at above average rates and vulnerabilities significantly reduced, policymakers had room to pursue a small dose of resource nationalism and more active indus-trial policies in key sectors. With no real need to court private invest-ment, a certain amount of hubris has also prevailed in policy circles.
Policymakers will feel a greater need to work with the private sector as they seek to spur growth and invest-ments while improving the quality of public services. In the end, that will most likely translate to a growing debate about the need for long-shelved growth-enhancing economic reforms, and more attractive terms for private investment in key sectors.
Amid a still tepid economic
recovery, the government decided to turn vigorously to the private sector for help with logistics infra-structure. Late last year authorities announced an ambitious schedule of concessions for this year and the next, seeking to attract more than $100bn in private investments in highways, rail, ports, and airports. While the state’s proclivity to squeeze potential investors by pro-
viding low rates of return has delayed and forestalled some investments, the trend within government is clearly to grant higher rates of return and more favourable terms to ensure upcoming auctions have sufficient bidders.
The next shoe to drop may very well be the oil and gas sector. After years of not conducting any bid round in Brazil’s vast offshore and even onshore reserves, Rousseff has announced three bid rounds in 2013. Debate within the administration has already begun to potentially ease restrictions to allow international oil companies to develop these reserves side by side with Petrobras.
The real test on whether policy is moving consistently toward a more investor friendly stance will come after next year’s presidential elections.
The good news for investors is that as economic difficulties mount, politi-cians will tend to be more constructive to the private sector. But should growth rebound and Rousseff win reelection comfortably, incentives for complacency may very well return. ●
Private sector ready to lend a hand Joao Augusto de Castro Neves and Christopher Garman from the Eurasia Group look at how the government is grappling with slower growth
“As economic difficulties mount, politicians will tend to be more constructive to the private sector ”
Excellence, Teamwork and Innovation… Powering today , Building Tomorrow.
Panacore congratulates Maritime ceo on a successful launch.
LAUNCH ISSUE 11
Despite watching dry bulk freight rates languish at very low levels for much of
the year (with capesize rates having often remained at levels below even breakeven costs) owners have shown a tremendous amount of optimism for the future and are on pace to order more new vessels this year than dur-ing any single year since 2010. During the first five months of this year alone, orders were placed for 266 new dry bulk vessels. In comparison, the first five months of 2012 saw orders placed for 131 dry bulk vessels.
Dry bulk newbuilding ordering activity has more than doubled the level of ordering activity seen during the same period last year, even though spot chartering rates have been lower this year. The market has been antici-pating that rates are set to increase by a moderate amount in the upcoming years, which has caused a surge of optimism to continue to spread among owners. For much of the second quar-ter of this year, for example, FFA prices for the capesize market stayed at at least $9,000 a day for the 2014 calendar year and $11,000 for the 2015 calendar year. A significant level of contango has been evident in the capesize FFA market, even though capesize char-tering rates spent much of the second quarter between $4,000 to $6,000 a day.
Optimism has continued to spread throughout the dry bulk market, but has it actually been warranted? For some segments of the market, we believe that yes, an optimistic outlook has been justified. Prospects for the capesize market, in particular, remain quite positive due to an ongoing decline in capesize fleet growth. While the last three years have seen capesize newbuilding deliveries exceed 200 vessels each year, deliveries this year are on pace
to total roughly 100 vessels. Growth in the capesize fleet is expected to decline even further next year, with only 75 capesize vessels anticipated to be delivered in 2014.
Prospects for the panamax market, on the other hand, are much less prom-ising than prospects for the capesize market, and a strong case can be made suggesting the recent surge in panamax orders has not been warranted. By the end of the year, approximately 370 panamax vessels will likely have been delivered, which would be just under the 375 panamax vessels delivered last year. The panamax market is the only segment of the dry bulk market that is likely to see newbuilding deliveries this year come close to exceeding the amount of vessels delivered last year. In addition, roughly 150 additional pana-max vessels are expected to be delivered in 2014.
Despite the ongoing robustness
in panamax fleet growth, a very large amount of orders for panamax vessels have been placed recently. During the first five months of this year alone, orders have been placed for 80 pan-amax vessels. In comparison, orders were placed for 118 panamax vessels during all of last year. In addition, May saw a 2013 record of 29 panamax vessels ordered, which was the largest amount of panamax vessels ordered since May 2011. During May 2011, however, panamax rates averaged $13,903 a day and prospects back then were moderately encouraging. In May of this year, though, panamax rates averaged $7,417 a day and prospects have been uninspiring. Panamax ordering activity has nevertheless surged.
Overall, the recent surge in cape-size orders and optimism for capesize rates has been largely warranted, as capesize fleet growth is poised to stay low through to at least the end of 2014. However, the market is on pace to see a total of 214 capesize vessels ordered this year which would exceed the lofty 196 capesize vessels ordered in 2010. If such a large amount of capesize vessels continue to be ordered during the rest of the year, then capesize rates will likely come under sustained vessel supply-related pressure again in 2015 and 2016, just as they have during the last few years. Prospects are even less encouraging for the panamax market. ●
Markets dry BULk
Optimism abounds, but should it?Too many recent panamax orders has Jeffrey Landsberg from Commodore Research worried
“The extent to which the oversupply issue
is impacting the dry bulk market has never been seen before”— Steve Rodley,
managing partner, Global Maritime Investments
Dry Bulk Newbuilding Orders (2009–2013)Handysize Handymax Panamax Capesize Total
2009 55 51 52 122 2802010 242 250 363 194 10492011 114 195 199 86 5942012 90 48 118 11 2672013 to May 68 29 80 89 266
Source: Commodore Research
Panacore congratulates Maritime ceo on a successful launch.
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LAUNCH ISSUE 13www.wallem.com
Delivering Maritime Solutions
When a cargo vessel needed re-activating. Wallem delivered.
Markets tankers
The tanker market is chang-ing right now — and is doing so fairly quickly. The
big change is coming from US trading but also from the slow-down in China and subsequent lowering of demand growth. US imports are at their lowest point in 17 years and during the driving season, the new and enhanced export of oil products has taken a breather. Has the limit been reached already? — no, we do not see it like that. But stable growth going forward isn’t here yet.
What is needed to reverse the sour trend? First of all, longer hauls to key growth nations in Asia would be good. This can be done if China seeks to take more oil from South America instead of growing its dependency on the Persian Gulf exporters. Secondly, longer hauls on US product exports. The latter is already happening, as US grow exports to places such as South America, Turkey and Japan.
The market for crude oil tankers hasn’t been particularly upbeat in the first half of the year. While a few pick-ups in earnings did arrive, the overall impression is one of discomfort.
In the oil market as such, China stays the positive factor for now, unless it too begins to produce more crude domestically. Some signs of that have surfaced during the first half of the year. It remains a negative event for the crude oil tanker market if China, like the US, becomes more self-sufficient than is the case today.
In the oil products market, US gasoline imports continue to disappoint, because the increased gasoline demand has been supplied by domestic production, which no
longer struggles to meet demand. While overall growth in the total US oil products trade has been flat recently, gasoline exports, and particularly distillate exports, have grown strongly.
As regards asset values, MR product tankers have delivered very decent returns if judged by their performance since the beginning of the year. An MR built in early 2013 has gained around 15%, while more vintage tonnage has gained 6%. Also, newer LR1 tankers have delivered — but here there’s an age cut-off point between 2007/2008; older tonnage has lost value.
On the supply side all focus con-tinues to be on product tankers, as the crude oil tanker segment is still experiencing some very tough times in the freight market.
The product tanker orderbook now holds 38% more tonnage at 14.3m dwt, comprising 229 ships, up from the January low at 10.4m dwt. 130 of these 229 ships are in the ‘hyped’ MR segment.
The hardship in the crude tanker segment is mirrored in the activity for newbuilding contracts. Whereas the much smaller (in dwt size) product tanker segment has seen new contracts for 7.3m dwt (101 ships), orders for just 5.7m dwt (36 ships) in crude tanker tonnage were signed. It is worth-while to notice that of the few orders placed so far, half of it rep-resents Chinese owners ordering nine VLCCs at domestic yards for 2014-2015 delivery ordered back in January and February.
Demolition activity in the crude oil tanker segment has finally picked up, as June and July have delivered 2.2m dwt for recycling. That amount is equal to the demolished tonnage during the first five months of 2013. ●
Crude’s dark prospects
“US imports are at their lowest point in 17 years ”
Improving asset prices for product tankers contrast with the clouds over the crude oil market, writes BIMCO analyst Peter Sand
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LAUNCH ISSUE 15
Markets containers
One major change in terms of work is that I am happily no longer concerned about quar-
terly performances of listed shipping companies, container shipping rates, or short-term market twists and turns.
Even in years prior, while still an equity analyst, I spent as much time as possible ignoring rates. I believe that shipping news organisations should ban all rate announcements from shipping lines as material for news stories. No official announce-ments from rate setting organisations. Period. Only third party objective benchmarking should be allowed, and preferably more diversity should be added there as well.
I am not sure I have found anything as useful as what Containerisation International used to provide on a quarterly basis, despite its polling tracking errors. And even more importantly there is no objective adjustment process that reflects rates ex-bunker, and even ex-terminal handling charges effects. The lack of properly reflecting topline revenue information has been the most important act of misleading industry outsiders. Even — or espe-cially — banks were at times willing participants in the deception.
Therefore going forward renewed attempts to focus on financial metrics should be given top priority. There are some new standard bearers in liner research, notably Alphaliner and SeaIntel, while the Containerisation International brand has been weak-ened somewhat by Informa. The Lloyd’s List franchise in containers is still strong in specific places, but
the business of Informa, perhaps by definition, is allowing for a change of leadership to take place within the industry. On the equity research side, we have remained in a situation of analyst overcapacity — too many analysts chasing the same informa-tion for the same investor base.
On the newsflow front, of course we can stay focused on the noise of rate hikes, rate corrections, quarterly results, etc. Or we can start looking for second derivatives. I think it is possible for financial leaders in container shipping to spend more time on the derivatives of blow-by-blow accounts so as to keep a better eye on the ball and stay ahead in financial terms. By seeking to improve returns for share-holders, public or family, market leaders have to find better ways to stay lean in a market driven down by overcapacity (too much China) and flat demand (too
much Central Bank stimulation).Looking forward, and back to lessons
learned from asset trading, liners have to invest in low cost capacity for a lower growth developed world. At the same time we have collectively learned that establish-ing a greener footprint pays.
In the end, strong return on equity (ROE) and strong real cash flow must be the only real outputs, while inputs can only be that which help deliver these results. Inputs such as low unit costs, economies of scale, fuel efficiency, proper cost pass-throughs, strong yield management and invest-ment in people. Companies such as Maersk, OOCL and even less well known or smaller players have proven they have the right idea, even if every-one makes a mistake here and there.
There have not been any major paradigm shifts in container ship-ping for a while. There have only been movements along the same curve. This has meant that we have had to reduce everything to the bare bones and do best with what we know best. Buying ships at cycle peaks, not adjusting strategy for lower growth, believing industry propaganda, these have been the cardinal sins. ●
Charles De Trenck eschews the editor’s brief to provide a market outlook, opting instead to look at how the sector is covered
Where is coverage of the container market bound?
“News organisations should ban all rate announcements as material for stories ”
“The industry needs to consolidate.
The only way is through mergers”— Søren Skou, ceo,
Maersk Line
2013_239_ad_maritimes_ceo_outlines_08_13.indd 2-3 13-08-13 12:22 PM
2013_239_ad_maritimes_ceo_outlines_08_13.indd 2-3 13-08-13 12:22 PM
maritimeceo18
Ecoships: marketing hype or game changer? Every issue Maritime ceo canvasses the industry on a key issue. This edition we look at the reality behind the green vessel craze
The era of the ecoship is upon us — is it clever marketing from shipyards in depressed times or a genuine game changer, and is now the time to invest? These are the questions doing the rounds of shipping boardrooms at the moment,
with opinions clearly very divided. Khalid Hashim, managing director of Thailand’s
Precious Shipping, reckons what the yards are pushing at the moment is “mostly marketing hype”. He points out that very few, if any, of these ecoships have actually been tested under real conditions to find out what the practi-cal savings are.
On the current plight faced by shipbuilders, Matthew Flynn, managing director of shipbuilding database Worldyards, does not mince words, saying there is “dramatic overcapacity”. It is this excess of yards, argues Flynn, that is actually spurring ship innovation and the ecoship era.
“The yards are hungry so they are pulling out the stops to build ships that are efficient rather than playing the game of efficient shipbuilding,” he explains, before quipping: “More ship for the buck rather than building more ships.”
At a press conference at this year’s Nor-Shipping event in Oslo, classification society Germanischer Lloyd (GL) said that the trend toward building and operating ecoships was irreversible, given the potential cost savings for the maritime industry. The rise of the ecoship has been questioned, with some suggesting that this focus on efficiency would fade if bunker prices fell.
Christian von Oldershausen, GL’s chief commercial officer, demonstrated how ecoships have substantial cost advantages over existing vessels, which has been borne out in a number of container vessel optimisation projects undertaken throughout the world by GL. These
advantages are found primarily at the concept design stage by targeting a vessel’s real operating profile, wider beam and increased capacity. Another major driver lies in design optimisation which focuses on hull lines, propul-sion, onboard systems and next generation engines.
“Alongside lower yard prices, bunkers will be a significant driver for cost savings in new vessels,” said von Oldershausen after analysing the composition of slot costs, made up of capital, operating, port/canal and bunker costs.
With fully optimised designs, savings are also stable across a whole range of operating speeds. Additionally, the new designs still generate substantial savings even setting aside the capital cost of an existing vessel. This means that eco containerships offer benefits large enough to justify orders beyond that expected from the tonnage balance in the market.
“We believe that ecoships are now the norm both today and for the future. With owners seeing the benefits from new tonnage being up to a third more efficient than average existing vessels and customers insisting on better performance, we won’t see many ships built that are not designed to minimise their fuel consumption and ecological impact,” said von Oldershausen.
“Ecoships represent a matter that could determine whether ships are
busy in years to come”— Roberto Cazzulo,
chairman of RINA and IACS
LAUNCH ISSUE 19
Quite so, concurs Remi Eriksen, the ceo of DNV Maritime and Oil & Gas.
“Stricter environmental requirements are coming and fuel costs keep on increasing,” he says.
The new chairman of the International Association Classification Societies (IACS), Roberto Cazzulo, is adamant this new breed of green ships are not shipyard marketing hype but are here to stay.
“Running costs are a key driver for this industry,” the class executive reckons. “Ecoships represent a differen-tial, a competitive advantage. Ecoships are one of the most important areas for innovation today. Economic factors are driving it.”
Nevertheless, he does caution, “Ecoships are not a magic wand. It is important to get a balance between technical solutions and operational aspects.”
The new president of BIMCO, the world’s largest shipowning body, John Denholm, the chairman and chief executive of Scotland’s Denholm Group, believes that the rush to order ecoships should temper the onslaught of further draconian international legislation.
When it comes to greenhouse gases, for instance, Denholm reckons the industry is now addressing the issue as “economic conditions are forcing us to do it”. Denholm says that if the industry carries on replacing tonnage with ecoships then there will be no need for taxes, levies or market based instruments to counter shipping’s carbon footprint.
However, the argument to order now — when shipping is in a tight spot financially thanks to rampant overcapacity — is debatable and questioned by one of the industry’s best known names.
Dr Helmut Sohmen is chairman of the BW Group, one of the world’s largest shipowners. At the age of 73 he has been through enough shipping cycles to know when
and when not to order new ships, and the lure of much touted ecoships today will not force him to bring out his cheque book.
“Technology is moving so fast, catapulting ahead,” he says, “ so that when better times come a few years from now, today’s ecoships might not be as fuel efficient as we think in three years time. Ships being built today might look a little elderly more quickly.”
Greg Atkinson, founder of Japan-based Eco Marine Power, a firm specialising in coming up with green tech solutions for ships, is aware of shipowner concerns.
“Of course in the current environment costs are a major concern for shipowners, so it is difficult for many of them to bear the upfront extra cost for green/ecoship related technologies,” Atkinson says. “It’s up to Eco Marine Power to reduce the cost burden plus present shipowners with a return on investment (ROI) timeframe that is appealing to them. Shipowners are also concerned about the safety and reliability of new technology.”
Nevertheless, the Eco Marine Power boss is adamant that the trend towards ecoships is more than just a craze even if the hype at times does undermine to some extent the very real shift towards a greener industry.
“Those of us working with renewable energy and emission reduction technologies need to be careful not to over promise and under deliver,” stresses Atkinson.
In concluding, Atkinson says, “In 10 years time I am confident there still will be an ongoing trend towards more energy efficient and lower emission ships. It may have a new name, but the ecoship spirit will be alive and well.” ●
“Ships being built today might look a little elderly more quickly ”
eXecUtiVe deBate
maritimeceo20
John Denholm
p.27
Eberhard Koch
p.31
Svend Andersen
p.36
In profile this issue
Jens Martin Jensen
p.33
Maritime ceo’s 17 correspondents around the world have been in touch with many of the world’s top shipowners. Highlights are carried over the next 18 pages
Herbjørn Hansson
p.34
LAUNCH ISSUE 21
in profiLein profiLe
Harry Banga
p.23
Mats Berglund
p.29
Andreas Sohmen-Pao
p.25
Khalid Hashim
p.29
Giles Fearn
p.30
Rony Sudjaka
p.38
Harry Vafias
p.30
Mudit Paliwal
p.26
Thomas Wilhelmsen
p.35Jens Martin Jensen
p.33Torben Skaanild
p.27
Thomas Kriwat
p.37
Helmut Sohmen
p.25
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LAUNCH ISSUE 23
in profiLe
Harry Banga is back in a big way. After decades at Hong Kong’s Noble Group the Indian national is in the midst of
kicking off his own giant project, the Caravel Group, a diversified global conglomerate focused on investment management activities, strategic asset ownership and the movement and storage of dry bulk raw materials, with $1bn ready to spend.
Named after the 15th century Portuguese ships that ushered in an age of innovation and discovery, set-ting Columbus and Vasco De Gama on their way to discover America and India, Caravel’s entrance into the shipping markets is set to be one of the maritime stories of the year.
Headquartered in Hong Kong, the entity is very much one for the Banga family. Banga’s two sons, Guneet and Angad, had both been working in the financial markets for the past 10 years, most recently Guneet with Citi and Angad with KKR.
“They wanted something on their own rather than joining Noble,” Banga explains, saying that Caravel can be a useful stepping-stone for the pair.
Caravel is based on three pillars of business. The first is in investments — an asset management and private equity platform, the second is putting all of Caravel’s logistics operations — such as shipowning and shipman-agement — under one umbrella, while the final part is in commodities.
When it comes to shipmanagement,
Banga is well set. He was behind Noble’s founding of Fleet Management, run by Kishore Rajvanshy, some 19 years ago. In March 2011, Banga completed a management buy-out of the manager for a reported $75m. Fleet is on track to have 300 ships under full technical manage-ment within the next nine months.
On shipowning, Banga says Caravel will look at the second hand market as well as a raft of newbuild contracts which are expected to be signed soon. A letter of intent on a new shipbuilding program has been signed, and is expected to become reality this month. Caravel has already invested in a number of ships, the first being a couple of small box-ships, though going forward the focus will be far more on the dry bulk side.
Banga tells Maritime ceo Caravel intends to purchase and own 10 to 12 ships over the next 12 months. However, he reveals: “Certain large private equity firms are keen to join us as we have the know-how, so if we joined forces then the fleet would be very large.”
Private equity’s sudden and large entrance into shipping in the past months has been one of the main themes of ship finance in 2013, the likes of Wilbur Ross, Oaktree, York Capital and Alterna Capital piling in
with hundreds of millions of dollars. On chartering, Banga says there
is no real limit. “Noble had 250 ships,” he recounts. “We could have 100 ships in 18 months.”
As for commodities, Banga says initial focus will be on raw materials for the steel industry, and then a grow-ing focus on coal for the energy sector.
Banga, a veteran of many a ship-ping cycle (a Master Mariner, he took control of his first ship back in 1978, aged just 28), he believes now is as good as any time in a generation to invest.
“If you look at the last 20 to 25 years, we are at the low end of the curve,” he says, admitting that it is hard to say when the markets will rise. “But,” he maintains, “this is one of the best opportunities you will ever get in the last 20 to 25 years.”
The three pillars — investment, logistics and commodities — are being created in a way so that they can easily be added to, something Banga’s previous firm did time and again. “We want to make it easy to diversify,” he says. For instance, Caravel’s shipping side could get into ports, while the investment side could decide to buy into more upstream or downstream businesses.
“Otherwise it’s a blank canvas,” Banga says with his usual genial modesty. ●
Banga’s new smashFormer Noble vice chairman Harry Banga is ready to make a significant splash with new investment vehicle, Caravel Group
“Noble had 250 ships. We could have 100 ships in 18 months ”
Caravel Group
Founded by the Banga family in Hong Kong with $1bn to spend,
Caravel will focus on logistics, com-modities and investments. Aims to
own 10 to 12 ships within a year and charter in a triple digit
number of vessels.
Spot on
LAUNCH ISSUE 25
in profiLe
Few opinions in shipping are more keenly sought than the head honchos of the BW
Group. Dr Helmut Sohmen, the chairman of the BW Group, and his son and heir apparent Andreas Sohmen-Pao, BW’s ceo, tend to be conservative in manner and busi-ness. Their movements during the downturn are worth noting.
“The markets are terrible,” Sohmen says. “There’s more and more owners hoping against hope.”
Sohmen reckons that the current doldrums will stretch for another “two to three years”. Overcapacity is his main worry.
Despite temptingly low prices on offer BW Group has by and large avoided the newbuild market, Sohmen says, dealing more in the second hand market such as its decision to buy out the Maersk LNG fleet or its offloading of a number of crude carriers.
“We are not generally adding to the existing tonnage,” Sohmen says, before adding pointedly, “We are not financially stretched like some of our competitors.”
The one recent order came in the middle of August. BW Gas ordered four plus two options very large gas carriers (VLGCs) at Hyundai Heavy Industries in Korea. Clarkson data puts the 84,000 dwt quartet as due for delivery in 2015. This was then followed by news that BW intends to list its LPG fleet in Oslo soon.
Andreas Sohmen-Pao casts his mind back five years ago and compares his fleet then and now. BW has undergone a remarkable transformation since the onset of the downturn in 2008, ditching its
former bulk reliance for a far greater exposure to gas.
“We have shifted more empha-sis into gas,” Sohmen-Pao says, adding that more than 50% of BW’s portfolio is now gas-related, the fastest growing area of business for the fleet.
“All sectors are really dependent on how the global economy shapes up,” he says. “Gas, particularly LNG today is very strong, but people have ordered a lot of ships, so it will probably moderate somewhat over the years. But gas is doing better than oil.”
BW has also shifted into offshore deepwater oil and gas production. “Historically we were more focused on dry bulk and oil,” he says.
BW has not ordered a new tanker or bulker for the past six years, the focus being LNG and LPG ships.
Sohmen, the father, now 73, has been through enough shipping cycles
to know when and when not to order new ships. He is clearly aghast at all the recent ordering of ships and sur-prised at banks’ willingness to fund this additional overcapacity.
“Banks seem to be willing to finance newbuild orders when knowing there is overcapacity in the market,” he says in a surprised tone. “Either they don’t have the right market information or perhaps they’re trying to protect their books,” he adds. Either way they’re unlikely to see too much of BW in the coming months. ●
BW Group
94 owned, part-owned or controlled vessels. Founded in 1955 by Sir Y.K.
Pao. World’s largest shipowner by 1979. Helmut Sohmen took the chair in 1986
and bought Norway’s Bergesen in 2003 and rebranded firm as BW.
Son Andreas Sohmen-Pao is ceo.
Spot on
Prudence paysLike father, like son — top management at the BW Group remains cautious in these troubled times
“The markets are terrible ”
maritimeceo26
in profiLe
It’s hard to believe that it is less than two years ago that Pan Asian Commodity Resources
(Panacore) was set up such has been the whirlwind of activities from this fast emerging bulk player. Mudit Paliwal, ceo of Panacore, quit his position as co-head of global freight business at Hong Kong trading giant Noble Group in November 2011, to set up his own commodities and shipping business. The lessons learnt at Noble have clearly stood Paliwal in good stead in how to judge commod-ity cycles and by extension the right time to invest.
In May 2012 Panacore ordered four kamsarmaxes, the start of a fleet build up that will eventually number between 16 and 20 ships, Paliwal reveals to Maritime ceo.
Newbuild prices have risen a little bit since that debut order.
“Like many investors, I too work on a contrarian principle and bottom of the market theory,” Paliwal says. “In shipping, timing is everything. We ordered with a view to build a fleet of 16-20 ships. It is impossible to touch the bottom of the market for a fleet build up, so you start at near bottom and then continue ordering along the price curve to average your fleet. This is an opportune time in the shipping markets.”
Paliwal says cash today is better to have in asset form rather than stashed in a bank. The f leet build up will take place in the
coming 12 to 18 months. Kamsamaxes will continue
to be the mainstay of new orders for Panacore. They are a “con-sumption story”, the ceo says, claiming they are “workhorses” for grain, coal and bauxite. Paliwal is convinced that dry bulk is in the midst of an aluminum cycle peak after the steel cycle that saw dry bulk hit dizzy heights in the previous decade. On the Panacore f leet menu will also be at least two handysizes for its captive trade. Capesizes, however, are “a big boys game”, something that is a way off for this young company. “We won’t do capes unless we can partner up with a producer or an end-user,” Paliwal says.
At present Panacore is very India focused, servicing the requirements of the end users in the steel and power sectors. It also has significant business in China supplying iron ore from its opera-tions in the Americas.
In the Middle East, meanwhile, Paliwal says the opportunities are “immense”. “I am surprised at the level of activity here,” he says from his Dubai headquarters.
Pancore’s focus in the Middle East is to be an industrial player instead of a service provider. It is working alongside the Abu Dhabi government and has been allocated 250,000 sq m of land and 50MW of power to set up Panacore Steel & Alloys with two submersible arc furnaces.
Remarkably in just 22 months Panacore has built up a genuinely global network with offices in Dubai, Hong Kong, Sydney, Mexico and Monaco, the latter being where it is centering its shipping asset management activities.
“The optionalities that you can build in your business are back today, these were missing in the better part of 2004-2008. Sow the seeds in these times and then see how many of them turn into trees that bear the fruits,” Paliwal says.
“The future is not competition, nor cooperation, it is in collabora-tion,” he reckons. “Collaborating with like-minded companies. Shipping has always been a relationship business even if it seemed very transactional for the better part of last decade.”
Paliwal’s parting advice to his peers: “Take time out and meet people, there is a lot one can learn and do.” ●
Panacore
Founded by former Noble high flier Mudit Paliwal in November 2011. A global trader in shipping and hard commodities Panacore ordered four
kamsarmaxes last year and has plans for an owned fleet of up
to 20 ships.
Spot on
Noble intentionsMudit Paliwal in Dubai has grand ambitions for his young company, Panacore
“Kamsarmaxes are a consumption story as the workhorses for grain, coal and bauxite ”
LAUNCH ISSUE 27
in profiLe
The new president of bimco, the world’s largest shipowning body, will pursue a strong focus
on the environment. John Denholm, chairman and chief executive of Scotland’s Denholm Group, became president of bimco, replacing Varun Shipping’s Yudhishthir Khatau in the top spot at the end of May.
“I have decided to focus on the environment,” reveals Denholm, saying that there are some “important battles” to be won on the environmental side.
When it comes to greenhouse gases, for instance, Denholm reckons the industry is now addressing the
issue as “economic conditions are forcing us to do it.” Denholm says that if the industry carries on replac-ing tonnage with ecoships then there will be no need for taxes, levies or market-based instruments to coun-ter shipping’s carbon footprint.
When it comes to the sulphur debate Denholm is concerned that precipitous regulations from on high might cause disaster to world trade.
“If SOx regulations come in too fast, both refineries and ships won’t be ready,” he warns, adding: “There could be queues at petrol stations.”
Scrubbers are unproven, he says, while LNG as a fuel is “a long way off”.
“The timescale of the regulations needs to be rethought,” Denholm urges.
The rush to push though ballast water regulation also needs to be relooked at, says Denholm, who will be in the role for a standard two-year tenure. Ballast water solutions are expensive, retrofits pricey, Denholm says, advising that this regulation should be similar to double hulled ships, a phase out over time.
The Denholm name is one of the most famous in shipping, stretching back to 1866 and is well associated with bimco, John’s great grandfather being one of the founding fathers of the organisation.
“Back then,” Denholm admits, “it was a good old fashioned cartel. Over time the association has evolved to suit the needs of the industry.”
Denholm, a trained accountant, is the fourth generation of his family engaged in the business. Two from the fifth generation are already work-ing in the firm, which employs 3,000 staff, excluding seafarers. ●
New bimco boss rethinks green John Denholm is determined to fight some of the more draconian environmental rulings facing shipping during his tenure
BIMCO
Largest international association representing shipowners. Controls 65%
of the world’s tonnage. Members in over 120 countries, including managers, brokers and agents. bimco draws its
board of directors from the 20 countries with the largest
tonnage.
Spot on
There’s not long to go before Torben Skaanild relin-quishes his time in one of the most well known roles in shipping. Remarkably, the 63-year-old’s
time with bimco stretches back 32 years, albeit with considerable stints away in between. Now as the secretary general and ceo of the world’s largest shipowner gathering prepares to step down he tells Maritime ceo of the greatest threats facing the industry he has championed for so long.
The “overarching” threat facing the industry, Skaanild says, is the oversupply facing practically all segments erod-ing asset prices necessitating financial restructuring as well as the scarcity of risk capital.
Moreover, Skaanild warns, new technology focusing on higher energy and operational efficiency is being offered to owners at considerably reduced prices compared to just a
few years ago, which may tempt owners to resume ordering, adding more tonnage to an already oversupplied market.
The industry needs to find a solution to improve energy efficiency in the existing fleet, and the question is whether there is capital and shipyard know-how around to do so, the bimco boss suggests.
Then there is the new environmental agenda with costly regulatory initiatives facing shipowners. “The last thing the industry needs now is additional cost,” he notes.
So what’s next after a 45-year career in the shipping industry? “I certainly wish to stay in the business,” Skaanild says, “but only in non-executive positions and only a few of those.” He will continue for another two years as chairman of the World Maritime University executive board. He still has his own firm founded back in 1995 to manage too. ●
Association veteran to retire
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LAUNCH ISSUE 29
in profiLe
Time is precious, rarely more so than in shipping, an industry that is more often than not a
precursor to what’s about to happen to the world economy.
When it comes to getting timing just right in our industry Thailand’s appropriately enough named Precious Shipping would appear to be riding the waves of the current cycles with the aplomb of a Swiss watchmaker.
Precious sold all its older ships - average age at sale around 26/27 years — during the good times with 35 ships sold starting in 2007 and ending in early 2010 at a capital gain of $80m and shrank the fleet from 54 to 19 vessels.
“The biggest risks shipowners carry are older and expensive ships
on their balance sheet,” Khalid Hashim, Precious’s managing direc-tor tells Maritime ceo.
The second biggest risk is the amount of leverage on their balance sheets, he adds.
“We waited patiently till we felt the time was right and then started to grow the fleet in earnest by increas-ing our leverage,” Hashim says. Since the last quarter of 2011 Precious has accelerated that process and now has 40 ships in the water. Precious also has four cement ships on order with delivery expected roughly one a quarter during 2014 and these are pre-committed to 15-year time charters at $15,000 a day. Precious has another two bulkers under construc-tion that will deliver in 2014.
“We have plans to take our fleet to an eventual size of between 60 and 65 ships,” Hashim reveals. ●
The message from the Admiralty headquarters of Hong Kong’s Pacific Basin
Shipping is loud and clear: focus. Since taking office last year Mats Berglund, the Swedish ceo of the city’s largest shipowner by fleet num-bers, has worked quickly to pare back non-core businesses.
This has seen Berglund offload the loss making roro operations, as well as nix nascent plans to get into project shipping by selling its interest in a breakbulk terminal in Nanjing.
Consultancy and surveying firm PacMarine Services has also been hived off. “It’s best to be good at one or two things, rather than average at four or five,” Berglund tells Maritime ceo.
In describing his company, Berglund keeps it simple: “We are a publicly listed dry cargo company with a strong towage division. It does not make sense for us to be too diversified.”
The focus is paying off clearly. Pacific Basin returned to profit for the first half of this year as well as chalking up a staggeringly aggres-sive buildup of extra tonnage. It squeezed a net profit of $0.3m at its interims where it revealed also that it has purchased 27 dry bulk vessels and long-term chartered another nine in the year to date. Acquisition commitments to date will expand its owned fleet on the water from 37 dry bulk ships at the start of the year to
72 by year end. Including newbuild-ings Pacific Basin now operates a 296-ship strong fleet.
Berglund says 2013 is Pacific Basin’s year of “counter-cyclical investment for growth”.
“We prefer second hand ships as we get some immediate return on our investment and we see long term upside in values,” Berglund notes. ●
Focus pays off for Pacific BasinUnder Mats Berglund, Hong Kong’s largest owner is back in the black
Pacific Basin
Hong Kong’s largest dry bulk operator operates nearly 300 ships, owning around one fifth with plans
to up the ratio. Founded in 1987, it has been bought out several
times. Listed in Hong Kong in 2004.
Spot on
Precious Shipping
Founded in 1989 and listed in 1993 Thailand’s Precious Shipping
is one of Southeast Asia’s top names in the dry bulk sector.
Current fleet stands at 40 ships, with plans to own up to 65
vessels soon.
Spot on
Timing is everythingAn interview with Precious’s Khalid Hashim
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maritimeceo30
in profiLe
Petredec, one of the world’s largest LPG traders, is mov-ing its sights towards more
downstream and storage operations as it gears up to be a full LPG logistics leader. Petredec, now shifting more than 12m tons annually, is in a period of rapid expansion. Its fleet consists of 18 owned ships, two bareboat
chartered, five on order and 32 on time charter. Giles Fearn, chief execu-tive, says more newbuilds will follow.
“Petredec is in a period of high investment in both shipping and downstream/storage,” says Fearn, add-ing: “We are looking to build with all sectors of the LPG shipping market.”
Currently yard prices are still “relatively low”, Fearn reckons. “We feel it is the right time to expand our fleet,” he adds.
The downstream operation is in its infancy and a large amount of investment is being made. A 15,000 metric ton pressurised storage in Mauritius — the world’s largest — will be running later this year. Petredec also has downstream busi-ness in Reunion and Bangladesh and is actively looking at more buys.
“The LPG market is in a state of
revolution,” Fearn says. “New supply is constantly being discovered most notably in the US with its huge shale gas finds. The fundamentals would appear to be positive, but as with every shipping sector it is cyclical. Margins are high currently and therefore outside investors are enter-ing the newbuild market. This will lead to a fall in margins further down the road.” ●
LPG logistics leaderThe chief executive of Petredec on plans to control the gas supply chain
DVB banker Dagfinn Lunde picked LPG as one of few shipping sectors with strong
prospects when interviewed by this title earlier this year, something not lost on one of Greece’s more dynamic and least media shy shipowners, Harry Vafias, boss of StealthGas.
“Our goal is to expand to a 20% market share in LPG from the current 14%,” says Vafias.
With $100m of what Vafias calls “dry powder” StealthGas is ready to hit both the second hand market and ship-yards as it looks to build its fleet of gas carriers to 50 vessels from today’s total of 33. Further cash-rasing in New York is a possibility, says Vafias.
In the immediate offing expect to hear about orders for four more LPG newbuilds in Japan, with contracts due to be signed soon for ships ranging in capacity from 3,500 m3 to 7,500 m3. These four would go alongside the current quartet in the StealthGas orderbook.
Newbuilds are easier than second- hand ships at the moment, Vafias says.
For StealthGas there are no plans at present to expand into different
sectors. “We want to stick to what we know best and to stick in a sector where demand and supply funda-mentals look very favourable,” Vafias maintains, citing market statistics that show LPG demand growing 6% a year and negative fleet growth. “There is nothing more attractive than small LPG,” he concludes. ●
‘Nothing more attractive than small LPG’: Vafias
StealthGas
Owns 33 LPG carriers and 4 oil tankers. Fleet’s average age is 10.5 years
and total LPG capacity is 161,822m3. Ranks No1 worldwide in owned vessels
in the 3,000–8,000m3 LPG carrier segment. Plans to grow to
50 ships.
Spot on
Petredec
Formed 1980, now one of the largest independent LPG firms, han-dling 12m tons a year. 18 owned ships,
2 bareboat chartered, 5 on order and 32 on time charter. Investing
heavily in downstream/ storage operations.
Spot on
LAUNCH ISSUE 31
in profiLe
Captain Eberhard Koch, a German national, is chairman, ceo and managing partner of
Österreichischer Lloyd Seereederei (Cyprus), a company whose lineage stretches back to 1836. The line was at the turn of the 20th century in charge of one of the biggest fleets afloat. With the demise of the Austro-Hungarian Empire in 1918, it ceased to exist and was reborn shortly after the Second World War as a shipowning company. For much of the 1990s and the last decade it was better known as a ship-manager, but these days it is firmly focused as an owner. Österreichischer Lloyd presently manages in-house its own nine vessels.
As a prominent businessman on the island, Koch has his own views on Cyprus’s precarious economy, which earlier this year brought the whole Eurozone on edge.
“After the former president of the republic of Cyprus was not eager in making decisions on anything for a long time,” he says, “for me the ability of the new government to reach an agreement and to listen seems crucial and not to lose this great opportunity now for taking positive steps forward for the better and with the continuing efforts to finally solve the tremendously important issue of the Turkish embargo on Cyprus-flagged ships.”
The package of measures announced by president Nicos Anastasiades intends to restore the viability of the financial sector and sound public finances over the ensuing years.
Koch surmises the government’s extreme actions to right the island’s finances were very just.
Cyprus “rightly agreed”, he says, that the local financial sector would be downsized with additional
measures including the resolution of the second largest bank and the recapitalisation of the country’s biggest bank.
“In this way,” Koch says, “Cyprus will remain an attractive interna-tional business centre and resident shipowners on the island may even be able — although initially with small steps only — to conclude ship financing in the future, something that has always been attractively offered by other major European banks and now increasingly appar-ent from American and Chinese interests.”
The shipping industry, already contributing 7% of Cyprus’s GDP,
will increase that portion once “the stormy weather” has settled and a balance of supply and demand has been reached, Koch says.
“Cyprus shipping is here to stay,” he stresses. “The financial measures only slightly affected our industry and the government recognizes and is proactive to the advantages of retaining or further enhancing the shipping industry on the island and, of course, retaining the attractive tonnage tax system in tact.”
Österreichischer Lloyd has nine multipurpose vessels at the moment, five of which are geared. The total fleet is young, with an average age of just 5.65 years and its size totals 55,400 dwt.
“No newbuildings are presently on order, although we are always seeking new investment opportu-nities in our fragmented segment,” Koch says.
The chairman says his company is interested in the slightly larger MPP vessels (10,000 to 35,000dwt), either Chinese newbuildings or decent second-hand tonnage.
Österreichischer Lloyd is also looking at getting like-minded part-ners involved in the company.
“We are primed to review var-iable partnership synergy options, although more favourable markets with improved returns as an incen-tive to invest again in the future need to be experienced,” Koch explains.
“Smaller, family-orientated shipowners such as myself, with nine vessels, may not have a firm and solid future in the totally changed financing scenario, going it alone,” Koch warns, “although we are very proud to have secured a sale and lease back offer from China earlier in the year.” ●
Österreichischer
Lloyd Founded in 1836, became one of
the world’s leading shipowners by the turn of the 20th century. Nowadays,
headquartered in Cyprus and owns nine multipurpose
vessels.
Spot on
Championing CyprusThe head of Österreichischer Lloyd says the island will remain a vital shipping hub
OESTERREICHISCHER LLOYDSEEREEDEREI (CYPRUS) LTD.
ESTERREICHISCHER LLOYD SEEREEDEREI (CYPRUS) LTD- (OELSR) is an internationally recognised Shipownerwith a very broad spectrum of close contacts and
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OELSR operates its vessels under the reputable European Flagof Cyprus and place of business near the port of Limassol,Cyprus. Originally founded in the Mediterranean and datingback to 1836, the Company runs a fleet of nine modern MPPvessels, all of which enjoy strong and healthy relationships withlarge International shipowning companies and operators.
The Company has accumulated a diverse knowledge andexperience with all types of seagoing transport – ContainerShips, MPP’s, Bulk Carriers, Reefer Vessels, Chemical / OilTankers, Cruise Vessels, PCC’s while being more focused andspecialised in the MPP segment.
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LAUNCH ISSUE 33
in profiLe
In December 2011 shipping’s most famous man, John Fredriksen, cannily played with his assets
to create a new firm to ride out the downturn. Frontline 2012 was born with Fredriksen stalwart Jens Martin Jensen taking the reins. As a pure asset play Frontline 2012 has not hung around, taking low prices on offer to snap up bargains in various sectors.
“We have invested in the product, LPG and dry bulk mar-kets,” Jensen tells Maritime ceo. In dry bulk the focus has been on capesizes as most recently evidenced with a pair of 205,000 dwt bulkers ordered at Bohai Shipbuilding for a very competi-tive $49m per ship.
“We have already seen the product market firming up and now the VLGC market is strengthening as well and we hope by end 2014 we will see a more balanced capebulk market when our first ship is arriv-ing,” says Jensen.
In the space of just 20 months Frontline 2012 has invested in excess of $2bn.
“The company is currently in the process of concluding one of
the most aggressive newbuilding programs ever executed,” Frontline 2012 said in its annual results statement this March. Most of the new carriers will be profitable at rates where “existing tonnage barely covers operating costs,” it said. Some 60 ships are now on order, with fuel efficiency to the fore in terms of design. Fredriksen and his partners including Jensen are betting on a shipping recovery by around 2015 at which point the new owning vehicle, Frontline 2012, should be well placed to reap rewards.
Most recently in the whirlwind of investment activity Frontline 2012 decided to take an equal share
in Avance Gas Holdings (AGHL), joining up with Stolt-Nielsen and Sungas Holdings.
Looking at the ship mix his company has plumped for Jensen says: “I think we have spread our-selves out quite well.”
In terms of which countries Jensen sees growth coming from he picks out the world’s two largest economies, citing product and gas exports out of the US while China will continue to grow at an “impres-sive” albeit slower rate.
The demise of a number of Asian shipping companies, espe-cially in China and Korea, could open up opportunities for others, Jensen maintains.
Jensen has been ceo of Frontline Management since 2008, having joined the firm in 2004. Prior to that he was a partner at Island Shipbrokers in Singapore. He started out his career in shipping with the AP Møller Group. ●
Frontline 2012 is shaking up the markets with vast spending on tonnage. Boss Jens Martin Jensen explains the rationale for the outlay
‘One of the most aggressive newbuilding programs ever’
“I think we have spread ourselves out quite well ”
Frontline 2012
Founded December 2011 as a means to offload unprofitable ships
from its parent, this John Fredriksen-led vehicle has ordered around 60 ships during the downturn, a tally
it is likely to add to in the coming months.
Spot on
“This downturn has taught us that it is
important to have control over your own destiny without too much debt”— Arne Blystad,
chairman, Blystad Group
maritimeceo34
in profiLe
A famous name in tankers is gearing up to expand to take advantage of a perceived
coming rebound in freight rates.Herbjørn Hansson, chairman
and ceo of Bermuda registered Nordic American Tankers (NAT), tells Maritime ceo: “We have a view that this market will recover. Therefore we are looking to expand the f leet in a responsible manner.”
Hansson explains the ration-ale for expansion. “It is,” he says, “all about risk management and total return — these are the two most important concepts to relate to.”
Hansson reckons the tanker
market is bottoming out right now, with the global fleet set to stop grow-ing, possibly even shrink a little while changing trading patterns should see “healthy” ton-mile gains in the coming years.
NAT’s fleet currently stands at 20 suezmaxes with no ships on order, a tally that is likely to change soon.
Newbuild prices appear to have bottomed out, Hansson maintains. “Currency factors have altered the competitive landscape a little,” he notes, while the bundle of orders placed this year have given the yards “more confidence”.
Like most shipping lines Hansson is keen to up NAT’s exposure in Asia. “It is clear that as domestic US production expands,” he says, “our focus is shifting east and we are proactive in building these relationships.”
Despite the bullishness, Hansson cannot avoid the current tough rates for suezmaxes which has seen some shareholder unrest at less than stellar quarterly results. At the end of August Hansson decided to release an open letter to reassure shareholders.
As to where and how NAT will go about building up its business Hansson is keeping his cards close to his chest.
“Generally it is my belief that if you have a good idea, you shouldn’t talk about it,” he concludes. ●
Nordic American
TankersFounded in 1995, listed in New
York. Current fleet is made up of 20 suezmaxes all trading on the spot
market with no ships on order. NAT intends to expand its
fleet soon.
Spot on
Despite some shareholder anxiety, Nordic American Tankers is ready to add to its fleet of 20 suezmaxes, according to chairman Herbjørn Hansson
Time to invest
“It is all about risk management and total return — these are the two most important concepts to relate to ”
“The underlying thing is that
shipping is still in a nice growth mode in terms of demand”— Dagfinn Lunde,
head of shipping, DVB Bank
LAUNCH ISSUE 35
in profiLe
He only turns 40 next year, and yet Thomas Wilhelmsen is already at the apex of
the family firm, as ceo of Wilh. Wilhelmsen Holding ASA, a diverse group that includes the world’s larg-est car carrying fleet, a global ship services offering and an increasing appetite for offshore investments.
With strong cash reserves Wilh. Wilhelmsen is looking at further ship acquisitions following its recent two plus two order for large car carriers at Korea’s Hyundai Heavy Industries, taking its confirmed car carrier orderbook to nine ships representing around 20% of the world car carrier orderbook in terms of capacity.
“We are well positioned to benefit from the growth potential in the markets in which we operate,” Wilhelmsen says. The company is already the world’s largest car and roro carrier with a 24% market share.
“Although volumes have been down the past few quarters we expect them to stabilise over the coming months,” he says, add-ing: “Looking in to the future, the underlying growth potential for transportation of cars and high and heavy cargo is positive. We will con-tinue to actively optimise and adjust our tonnage to market demand.”
In the car carrier segment the group has two well known brands, Wallenius Wilhelmsen Logistics and EUKOR Car Carriers.
“The strong long term sentiment in the market also means that we need to secure new tonnage,” Wilhelmsen says.
Over on the maritime services side of the group, there has been, Wilhelmsen admits, a slowdown in revenues symptomatic of the tough times facing many owners. “However,” says the boss of one of Norway’s most famous maritime
firms, “I am proud to see that we have kept our market share and that the top line is growing albeit slower than we would like to see.”
Wilhelmsen’s third and final business strand is its holding and investment segment in which attention has very much turned to the energy sector of late, a move that has seen it buy into NorSea among others recently.
“Offshore activities are expected to remain high, driving demand for supply base development and logistics services both in Norway and abroad,” Wilhelmsen says.
Although the current Norwegian tonnage tax system is “more or less” in line with other similar systems, Wilhelmsen says, the group decided in 2008 not to enter the new tonnage tax regime. The basis for the decision was related to the “predictability and sus-tainability” of the new regime, he says.
“Stable frame conditions — also for topics other than tax such as environmental regulations — are necessary to create a level playing field for companies competing on the global arena,” the shipping tycoon says. Moreover, Wilhelmsen reckons the government must take other tax issues into account.
“As many shipping companies are family owned,” he concludes, “favourable wealth and inheritance taxes are also important issues if our government expects companies and shipping families to continue to be located in Norway.” ●
Wilh. WilhelmsenFamily firm with 3 divisions:
Shipowning — Wallenius Wilhelmsen Logistics, eukor Car
Carrier and Glovis. Services — shipmanagement, port agency,
tech solutions. Investment — offshore segment.
Spot on
Family prioritiesMaritime ceo catches up with one of the rising stars in the Norwegian maritime universe, Thomas Wilhelmsen
“We will continue to actively optimise and adjust our tonnage to market demand ”
maritimeceo36
in profiLe
BBC Chartering’s ceo Svend Andersen is on the hunt for more tonnage. “We see good
chances to further grow our busi-ness significantly,” he says, adding: “Our simple yet focused business model attracts both shipowners and shippers.”
Andersen says he is keen to become a real force in the massively fragmented projects sector.
“Our segment is about to con-solidate,” he predicts, “and we see ourselves as an attractive entity that is open to discuss strategic partnerships that follow the same goal as we do: to improve market access to a global multipurpose/heavylift fleet. With that our vision is to create a more efficient industry structure in our still highly fragmented business segment.”
Established in 1997 in Germany, the company shifted headquarters from Bremen to Leer two years later. Today it lays claim to operating the largest multipurpose and heavylift fleet in the world.
As commercial managers in 2012 BBC Chartering operated an average of 133 ships equating to 1.6m dwt, and at peak times more than 150 vessels ranging from 3,500 dwt to 37,300 dwt.
The line is in the midst of a signif-icant rejuvenation of its fleet focusing on two heavylift newbuild programs. One series is the BBC Everst type;
eight 9,300 dwt vessels each with two 350 metric ton cranes, and the second is the BBC Amber type; fourteen 14,360 dwt ships with two 400mt plus one 80mt lifting gear. All these ships are being delivered this year.
Andersen, a 40-year breakbulk veteran, reckons the niche sector has already hit rock bottom and is now seeing “promising developments”.
“We can look confidently into the future again as demand devel-opment for shipping capacity and supply of tonnage slowly comes back to a more balanced ratio,” the ship-ping boss predicts.
Shipping as a whole had been misled, Andersen says, on a perceived capacity shortage years ago.
“The shipping industry and banks are still digesting this expen-sive lesson,” Andersen notes.
BBC Chartering’s network is global. However, some of its strong-est sales growth has been in Asia in recent years, a region where the
line now has offices in Singapore, Shanghai, Tokyo, Seoul and Mumbai.
“We expect the market to continue to be very competitive, especially in Asia. The market there focuses on prices rather than quality,” Andersen says. “At the same time we see a lot of cargoes being re-circulated due to the fast paced changes in the Chinese market. Operators and carri-ers enter and leave the stage quickly and they often fail to perform. This is where we see our chance.” ●
Consolidation neededThe head of BBC Chartering, one of the world’s largest project shipping firms, discusses where the sector is headed
“We expect the market to continue to be very competitive, especially in Asia. The market there focuses on prices rather than quality ”
BBC Chartering
Founded 16 years ago, the German line is now the largest operator of multipurpose and
heavylift ships in the world. Undergoing a significant fleet
rejuvenation this year.
Spot on
“Don’t trust the mainstream, listen
to your clients, don’t get content”— Ingo Hesse,
managing director, EMS-Fehn-Group
LAUNCH ISSUE 37
in profiLe
It’s hard to know where to begin with when profiling the Mercmarine Group. Tracing
its roots back to the 1917-founded German KG firm Reederei Eugen Friederich it is now based in Sri Lanka as an owner, manager and training company.
The Mercmarine Group of Companies is a newly created umbrella brand that unites the iden-tities of four associated companies including the original KG fund.
“The umbrella brand allows us to show the whole breadth of our organisation as a maritime service provider,” explains ceo Thomas Kriwat, who took over the company from his father in 2006.
“Part of our strategy,” he elabo-rates, “is becoming more attractive for partners who look at a wide range of shipping expertise within one organisation. That’s why we intro-duced our new brand and adopted a more corporate structure.”
Reederei Eugen Friederich saw the potential of the upcoming Asian markets early and established a German-Sri Lankan joint venture in 1981.
The Mercantile Shipping Company is Sri Lanka’s leading ship-owning company and the only one of its kind to be listed on the Colombo Stock Exchange.
The company underwent a com-plete renewal of its fleet in 2009/10. It was its first newbuilding scheme since the early 1970s. The new fleet consists of four 12,500 dwt MPVs plus two 7,800 dwt MPVs. Its largest vessel is a 1,350 teu boxship.
“It successfully combines
German shipping expertise with Sri Lanka’s long-standing experience in the maritime industry,” says Kriwat.
Mercantile Marine Management (MMM) is the flagship of the group established in 1996 to cater to the growing demand for trained and experienced crew. Situated in Colombo, MMM is the largest crew manager in Sri Lanka. Among its many credits MMM was the first company in Asia that was MLC 2006 certified by GL. As a crew manager MMM manages close to 100 vessels and wants to increase that number to 300 by 2017.
Meanwhile, the Mercantile Seamen Training Institute (MSTI) was founded as the first private sec-tor training centre in 1986.
As if that was not enough Mercmarine started a joint venture last year with Hemas Holdings in Sri Lanka aiming at offshore support services, a sector Kriwat wants to become a regional leader in by 2020.
Kriwat has both praise and advice for the Sri Lankan govern-ment’s efforts to promote maritime.
“Sri Lanka has a unique strate-gic location to develop as a leading maritime hub,” he says, adding: “The Sri Lankan government is presently doing more than any government before to improve the country’s infrastructure.”
Still, he cautions that the efforts are too “fragmented” and an overall maritime policy that looks beyond port infrastructure development is required.
“We need to look at setting up a competent, modern mari-time authority, developing human resources and facilitating local coastal shipping,” Kriwat reckons.
On the markets Kriwat says the industry was “spoiled” by the good years it enjoyed from 2002 until 2008.
“It seems to have forgotten about the history of shipping economics,” he says. “If you take a serious look back into the younger history of ship-owning in particular, it has always been a rather difficult business.
“I don’t think it is wrong to say overall we had far more bad years than good years. However, the last years were exceptional. I am certain we have hit the bottom. Unfortunately, the markets seem to have stabilised on a fairly low level and I do not believe we will see a speedy sustainable recovery.” ●
Sri Lanka’s top name in shippingThe Mercmarine Group covers owning, management, training, offshore and even a KG fund
Mercmarine Group
Mercantile Group has a history dating back to 1917. Mercantile
Shipping Company is Sri Lanka’s leading shipowning company
and has four 12,500 dwt MPVs plus two
7,800 dwt MPVs.
Spot on
“Combining German shipping expertise with Sri Lanka’s experience in the maritime industry ”
maritimeceo38
in profiLe
Many people claim to have shipping in the blood. Few have had it drip fed
more than Indonesian national Rony Sudjaka, the chairman and md of Singapore-based offshore sup-port vessel (OSV) specialist Pacific Richfield Marine.
Wearing a trademark cap Sudjarka says of the firm that he founded in 1989 that while there is plenty more competition in his sector all of a sudden he is not worried as the ships he builds and owns are “higher class” with big engines and more back up systems.
Sudjaka has a long history of building OSVs, but had quit the practice for a number of years before
returning to it in 2008, when he found he was unable to get ships built at other yards because they were so busy. He made the decision to rent a yard in Singapore and started churning out high spec ships.
Sudjaka now owns 55 ships. His shipyard has one dock and is able to build eight ships every 18 months. He builds ships for himself and charters them onto oil majors across the world. Sudjaka owns two design firms too, who are charged with making his innovative OSV design ideas reality. Pacific Richfield Marine became the first yard in Singapore three years ago capable of working on up to nine vessels at any given time.
“Singapore shipbuilding has now stepped down,” reckons Sudjaka, “as many have moved to China because they are cheap with a 30% difference in price.”
Sudjaka’s father worked in Hong Kong at the old Taikoo Shipyard from 1926, before moving back to Indonesia to do contracting work. Sudjaka himself, now 76, has been in the OSV business now for more than half a century. ●
Rony Sudjaka, chairman of Pacific Richfield Marine, has been actively involved in offshore support vessels longer than almost anyone else
Ahead of the OSV curve
“Sudjaka, now 76, has been in the OSV business for more than half a century ”
Pacific Richfield
MarineSupport services for the offshore oil and gas industry. Manages and operates a fleet of 55 ultra modern
vessels across the globe from its home base in Singapore
where it also runs a shipyard.
Spot on
“The traditional maritime sectors are
seeing a talent drain as employees are pursuing opportunities in the growing offshore sector”— Jack Mylott,
founding partner, Flagship Management
maritimeceo40
GadGets
A flying round
Mark Twain acerbically noted that, “Golf is a good walk spoiled”. Well, the folks at Neoteric Hovercraft have teamed up with PGA star Bubba Watson to
reach the pinnacle of golf’s ability to spoil a good walk: the BW1 Hovercraft Golf Cart. Available from Hammacher Schlemmer for $58,000, the hovercraft cart is powered by a two cylinder, 65 hp petrol engine, allowing it to go up to 70 km/h across greens and water hazards alike. To steer, there’s a bike style handlebar system. Braking/reverse is taken care of by the patented fly-by-wire systems onboard that provide reverse thrust through two thrust buckets at the back, also controlled by the handlebars. Its maximum load is four people and two golf bags in the back. And as it’s up to 23 cm off the ground when it’s running, it won’t leave a mark on the course. There is, to my mind, only one thing wrong with the hovercart, and that is the fact that I can’t see why you’d want to get out and play golf when you could be speeding around in a hovercraft instead.
www.hammacher.com$58,000
Is it a dolpin? Is it a plane?
If speeding over the golf course still seems tame, perhaps a Seabreacher from Innespace might be more your speed. Shaped like a jet fighter
crossed with a dolphin, shark or orca, depending on the model, the Seabreacher tops 65 km/h on the surface of the water and 32 km/h underwater, and is probably the most ridiculous fun you can have in and on the water. The Seabreacher seats two in a watertight cabin, and much like the sea creatures it’s shaped like, it can jump over 3.5 m out of the water, roll 360° and do tricks. The downside? The only one we can find is that with a 1500cc, four stroke, 215 hp ROTAX engine powering the axial flow jet pump for vectored thrust, the Seabreacher doesn’t run on fish! This sounds dangerous, but the vessels have lots of safety features, such as a self-right-ing hull with positive buoyancy, bilge pumps, a 1 cm thick impact-resistant acrylic canopy, and they have been US Coastguard inspected.
www.seabreacher.com$100,000+ (depending on model & options)
A fresh spin on the 3D print revolution
The next major technological revolution looks set to be 3D printing, and although I can’t quite think of a reason to justify buying the MakerBot Digitizer, I still want it from the depths of my
techy stomach. Whilst 3D printing is still in its infancy, and therefore still mostly the purview of the geeky hobbyist who’s not afraid of a bit of tinkering, the MakerBot Digitizer represents an ele-ment that has thus far been missing from the personal 3D printing equation: a 3D scanner! That’s right, stick whatever you want to scan onto the MakerBot Digitizer and it will scan it using two lasers and a camera. I say anything, but with this model, the object can’t be bigger than 20cm high and 20cm in diametre, or weigh more than 3 kg. But as the end product is a 3D digital file, you can always scale up the model to print out a bigger one. I did mention the tech was new, didn’t I? Because right now you can only pre-order, with shipping scheduled for mid-October.
www.makerbot.com$1,400
LAUNCH ISSUE 41
Books
The environment is now offi-cially a subject that will not go away. Consequently books
keep on appearing covering the issue. Seemingly China is one environmental problem that keeps looming its head.
A useful roundup of case studies of recent environmental problems in China comes from the team behind the bilingual website Chinadialogue (.net). The site’s editor, Sam Geall, and founder, Isabel Hilton (herself a noted and longstanding Sinologist) have pulled together a series of chapters detailing problems concerned with air, water and industrial pollution in China and the Environment: The Green Revolution (Zed Books, 2013).
Perhaps most in-depth, and also a case concerning a major port city, is New York Times’ journalist Jonathan Ansfield’s study of the Xiamen PX case. Ansfield’s account of this landmark not-in-my-backyard (NIMBY) struggle shows how areas of growing industrial importance and major ports attract both indus-try and people. The mix of the two is not always easy and often toxic.
Former foreign correspondent in China Craig Simons has chosen to look at how China’s seemingly endless hunger for resources is causing environmental problems in other countries. The Devouring Dragon: How China’s Rise Threatens Our Natural World (St Martin’s Press, 2013) notes that the PRC is the world’s top importer of tropical timber, mostly harvested illegally in Indonesia while, in Brazil, farmers clear large swathes of the Amazon rainforest to meet Chinese demand
for soybean oil and beef. In the US, toxic levels of mercury originating from Chinese power plants have pol-luted a third of American lakes and nearly a quarter of its rivers. With the Obama administration placing China among its top three foreign policy priorities, Simons argues for ways in which the US and China can forge a new era of cooperation, sup-port emerging environmental groups within China, and begin to ensure a sustainable future for the planet.
Tapan Sarker, Moazzem Hossain and Malcolm Macintosh’s The Asian Century, Sustainable Growth and Climate Change (Edward Elgar Publishing, 2013) looks across the Asian continent and contrasts the strong growth and improvement in people’s living standards with the environmental degradation that has occurred. While lives are generally better, they argue, right now policy makers are faced with a choice — carry on growing at the current rate and with the current deleterious
affect on the environment or reap the consequences in terms of public health, sanitation and loss of natural resources.
The author’s remit is large — among those factors that affect environment are not just industry but also demographic conditions, tax reform and the responsible use of nat-ural resources in the years to come.
Finally let’s not forget that transport plays its part in the envi-ronmental debate. An interesting little e-book has been published by a group of World Bank economists examining just how Pakistan’s 2011 Framework for Economic Growth affected the environment in relation to the development of the transpor-tation sector. Greening Growth in Pakistan through Transport Sector Reforms: A Strategic Environmental, Poverty, and Social Assessment (World Bank, 2013) looks at trans-port’s impacts on air quality, noise pollution, road safety, hazard-ous-materials transport, climate change, and urban sprawl. Though limited to Pakistan, it is an inter-esting study with a lot to be learnt by those forming transport and environment policy in a host of emerging markets. ●
Green, growth and globalisationPaul French combs through a swathe of books on the environment, with China choking its way to the top
“In the US, toxic levels of mercury originating from Chinese power plants have polluted a third of American lakes and nearly a quarter of its rivers ”
maritimeceo42
traVeL
Hot foot it to the Kapalı Çarşı, Istanbul’s Grand Bazaar and one of the world’s largest,
oldest and busiest covered markets, in operation for at least the last 600 years. Don’t forget to grab a good walking map (free from tourist information and all good hotels). The streets of the market are old and cobbled, and in them you will find textiles, cushion covers and rugs, hanging lights, gold and silver jewellery, furs and antiques. It’s a riot of colour and sound, and souvenir heaven. Don’t forget to bargain. (Allow about 2-3 hours; free).
Eat in a baclavaleri. Be like a local, and order a mixed plate of boreka (baked dough, stuffed with either cheese, or minced meat, or spinach) followed by baklava (layers of pastry with nuts and soaked in honey). Wash it all down with Turkish coffee — sweet, thick and black, and you’re in heaven. (1 hour; approximately $10).
Have a world famous Turkish bath. Try the gorgeous Çemberlitaş Hamam, a ten-minute walk from the Grand Bazaar, and one of the finest examples of Turkish bath archi-tecture anywhere in the world. Be prepared to have your breath taken away by the beauty of the hot-room, its arched dome punctured with small glass globes — “elephant eyes”
— that let in wonderfully diffused light. Then get sweated, cracked, pummelled, scrubbed, soaped, soaked, rubbed and rinsed in what will certainly be the most painful, powerful and invigorating massage of your life. Men and women are sepa-rate, change rooms, towels and robes provided. If you don’t like being naked in public, this isn’t a place for you. (Allow 2-3 hours, about $120 includ-ing massage and tip to masseur).
Visit the Basilica Cistern, the ancient Byzantine cisterns below the modern city of Istanbul. Absolutely stunning: my personal favourite of Istanbul’s many tourist sites. Entry is a few minutes walk from the hamam. On the way, you will pass the famous Blue Mosque and Sultan Ahmet — great to visit if you have the time, but if time is short don’t bother — you’ll
be fighting the hordes just to get inside. (1 hour, $5).
Walk across the Galata Bridge. As you cross the thin waterway of the Golden Horn, you quite literally will be walking from Asia into Europe. How often do you get to do that? (1 hour, free).
Stroll the length of Isttiklal Caddesi, the 3 km long main pedestrian shopping thoroughfare of modern-day Istanbul; or, ride the very quaint, very European, tram part of the way ($5). Shop to your heart’s content at the boutiques. (Allow 2-3 hours, free).
Visit the Istanbul Modern, a museum dedicated to the best of cool and edgy Turkish modern art, located right on the Bosporus waterfront in a converted industrial building. (Allow 1-2 hours, $15).
Hop in a cab and head to the Four Seasons Hotel on the Bosporus. Take a seat at the outdoor terrace of the Lobby Lounge or at the Pool Grill, and enjoy stunning views of Istanbul and the Bosporus as the sun goes down. Killer cocktails and great food will finish your day in style. (1-2 hours, $40). ●
Traveller’s Tip: Don’t be afraid of Turkish taxis, even if they do drive pretty fast. They are cheap, plentiful, and the taxi drivers won’t rip you off.
Your Day Plan Summary:Activity Time CostWander the Grand Bazaar 2-3 hours Free
Eat Boreka & Baklava; drink Turkish Coffee 1 hour $10
Enjoy a Turkish Bath & Massage 2-3 hours $120
Site-see at the Basilica Cistern 1 hour $5
Walk across Galata Bridge 1 hour Free
Stroll Istatklal Cadesi 2-3 hours Free
Visit Istanbul Modern 1-2 hours $15Sundowners at the Four Seasons Bosporus 1-2 hours $40
Continent hopping In Istanbul for work, have a free day for sightseeing? Eytan Uliel provides the inside low-down on what to do
LAUNCH ISSUE 43
the contrarian
If you were at sea on the July 15, 1977, when the 1972 Colregs came into force, replacing the 1960 ver-
sion, you are at least in your fifties. That means that practically every deck officer now at sea, and almost every lecturer and professor teach-ing the collision rules and collision avoidance to those now going to sea, has relied on the 1972 Colregs for the whole of his or her career.
No earlier version of the Colregs lasted anything like so long.
The IMO are busy people. We know that. But are they right to assume, as it seems they do, that the 1972 Colregs represent perfection?
To point out the blitheringly obvious, in 1972, traffic separation schemes were the big new thing; and the 1972 Colregs were brought on by a need to make the very first traffic separation scheme (TSS), in the Dover Strait, mandatory, in a hurry, after the events of 1971.
On January 11 that year, the tanker Texaco Caribbean, in ballast, in the pre-inert gas system era, collided with the Peruvian ‘tween-decker Paracas, blew up, killing eight of her crew, and sank. The next day the German Brandenburg struck the wreckage and sank, killing 22 of her crew and on February 27 the Greek Niki struck the well-marked wreck and sank with all hands. This happened in northwest Europe, and was embarrassing.
“That could not happen now”…except that on the December 14, 2002, despite the 1972 Colregs, it did — the Tricolor was rammed and sunk, in the Dover Strait, by the Kariba; the following day the Dutch Nicola struck the wreck and on January 1, 2003 the Turkish Vicky did so too. History repeated itself as expensive farce — nobody was killed.
The lack of deaths, that time,
owed nothing to the Colregs and everything to improvements in ship design and in safety equipment in the intervening 30 years.
The Colregs say nothing about ARPA, nothing about AIS, nothing about VHF, nothing about VTS.
Today, most ships become aware of each other on radar, not visually. Most ships communicate on VHF using AIS data where risk of collision exists.
The 1972 Colregs perpetuate a colossal mistake — one made in 1863, when the British and French gov-ernments replaced the 1842 Trinity House Rules. For no reason that any-one can explain, the two governments extended the concept of the ‘stand on’ and the ‘give way’ vessel in a crossing situation from sailing ships, which need such a rule when close hauled on opposite tacks, to power driven vessels, which never need such a rule, and had not had it in 1842.
This means that the rules that apply change when ships come in sight of each other. At that point, each has to determine whether she is overtaking, meeting or crossing, and in two of the three cases one ship has to keep her course and speed and wait for the other to manoeuvre… only if the give way vessel does not
alter may the stand on vessel do so. This is known in the trade as the Rule 17 Nightmare. It is an often-fatal bureaucratic absurdity.
The full mission bridge simulator has given us a very powerful tool, unknown in 1972, for evaluating col-lision scenarios and deriving a better set of Collision Regulations, which take account of today’s technology. The IMO has done nothing.
On the evening of Friday, August 16, the ferry St Thomas of Aquinas, with 870 people on board, inbound into Cebu in the middle of the Philippines, in or joining the Cebu TSS, collided with the out-bound Sulpicio Express 7 (pictured) and sank. Early reports suggest a classic 1972 Colregs issue, with the inbound ferry, unable to alter to starboard because of a shoal, and assuming that the other vessel was taking no action, altering to port just as the outbound cargo ship seems to have altered to starboard.
It seems that 120 people are dead. The correct response to this is not: “Who cares — it was just another third world ferry…”
The correct response is for the IMO to be shamed into showing some responsibility. ●
Andrew Craig-Bennett takes aim at 1972’s Collision Regulations
In need of an overhaul
maritimeceo44
Yes 65No 35
Every couple of weeks on Maritime ceo’s LinkedIn page we pose a topical question for the industry to vote on. Below are some early results
You decide
Product tankers 14Chemical tankers 19LPG 46Handysize bulkers 19
What shipping sector has the best fundamentals for growth?
Yes 33No 67
Are banks to blame for shipping’s malaise?
Is slow steaming here to stay?
Yes 80No 20
Do shipowners need to fork out for private maritime security firms onboard their ships any more?
Yes 59No 41
Are newbuild prices now at the bottom of the cycle?
Yes 17No 83
Has shipping fully embraced e-commerce?
Yes 40No 60
Are SOx regulations likely to come in too fast for the shipping industry to handle?
MarpoLL
Organisers: Posidonia Exhibitions SA, e-mail: [email protected]
www.posidonia-events.com
Posidonia 20142-6 June 2014
Metropolitan Expo, Athens Greece
The International Shipping Exhibition
it's a great deal
Maritime_CEO_210x297 12-07-13 14:42 ™ÂÏ›‰· 1
